Uncertainty surrounding Brexit officially “pushed” the North’s private sector into decline last month, as new orders slumped and business activity fell for the first time in three years, a new economic report shows.
Ulster Bank’s latest Northern Ireland PMI report highlights that businesses in the North also axed jobs at their fastest rate in six years while the number of new export orders won by Northern Ireland businesses plummeted.
The over index reading fell from 50.2 in February to 48 in March. Any reading below 50 indicates a contraction.
Richard Ramsey, Ulster Bank's chief economist Northern Ireland, said that while there may been a tendency to overuse the term "Brexit uncertainty" in recent years, the bank's latest NI PMI report showed the impact of the UK government's continuing inability to find a way forward, was now very tangible.
“Northern Ireland firms are increasingly pessimistic about the year ahead. Clearly the potential for a no-deal scenario was exercising the minds of business owners last month.
“Positives were in short supply in the latest survey with manufacturing continuing to be the only sector recording output growth; albeit that stockpiling was no doubt a factor.
“At the other end of the spectrum locally is retail, with sales activity declining at its sharpest rate in four years,” Mr Ramsey added.
He said the PMI report underlines that the North’s largest sector – the service industry – was one of the worst hit by the slowdown with output, orders and employment numbers all significantly impacted.
Deteriorating economic performance during March contributed to the weakest quarter in terms of output for the North since the third quarter of 2016.
Mr Ramsey said the fact that both employment numbers and export orders “had their their worst quarter since the first half of 2013” paints a very stark picture about where the North’s economy is heading.
“Northern Ireland differs from the rest of the UK in that there has been a lack of decision-making on two fronts, with the absence of an Executive adding to the complications created by uncertainty over Brexit.
“This has driven a declining picture regarding confidence, with Northern Ireland respondents, particularly in the construction sector, the most pessimistic in the UK regarding future output,” he added.
